Crypto-assets are high-risk. Their value can drop sharply and quickly, and you can lose all the money you put in.
The main risks
- Volatility. The value of many crypto-assets moves dramatically within days or hours and can fall to zero.
- Few safety nets. Crypto-assets are generally not covered by deposit guarantee schemes or investor compensation schemes. EU rules under MiCA regulate issuers and service providers but do not protect the value of crypto-assets.
- No undo button. Transfers recorded on a blockchain are, as a rule, final. Sending to the wrong address or to a fraudster usually cannot be reversed.
- Lost or stolen keys. If private keys or a recovery phrase are lost, access is normally gone for good; if they are stolen, so is control.
- Provider failure. Companies that hold crypto-assets for customers can become insolvent, be hacked or act dishonestly.
- Scams. Fraud is widespread around crypto-assets. See our safety basics.
- Software risk. Bugs in wallets, smart contracts, bridges or networks can cause losses.
- Legal and tax risk. Rules differ between countries and change over time, and transactions can have tax consequences.
- Complexity. Many crypto-asset products are hard to understand fully, even for experienced users.
Where we stand
Learning Point Hub does not encourage anyone to acquire crypto-assets and gives no advice on doing so. Before any financial decision, get independent advice from a licensed professional and check the registers and warning lists of your national financial regulator.
Further reading: ESMA warnings and publications for consumers.